Top Manufacturing Trends and Challenges in 2018 and Beyond

In 2017, manufacturing was on the rise, adding 138,000 jobs by December. Industry’s total real output was near an all-time high for the previous three years. Overall, last year was a good year for manufacturing. With technology being the new focus in manufacturing, the question is not if but when majority of manufacturers will start using it. What can we expect in 2018 and in the years to follow?

Despite many promises by the current administration and a healthy economy, manufacturing jobs are not all coming back. The 2019 budget proposal  “calls for eliminating federal funding of a program to support small manufacturers.” Additionally, imposing tariffs on steel and aluminum imports “would make plants in the US less competitive” as manufacturing groups warned earlier this week. As a result of higher costs, more manufacturing jobs might be lost. The threat of retaliation from other countries could also impact other exports.

Technology challenges

Apart from policy, technologies will have significant impact on industry. According to IDC’s report, called FutureScape: Worldwide Manufacturing 2018 Predictions, by 2020, one third of all manufacturing supply chains will be using analytics-driven cognitive capabilities. The report predicts that this will help increase cost efficiency by 10% and service performance by 5%. By 2021, “20% of G2000 manufacturers will depend on a secure backbone of embedded intelligence.” That means many manufacturers will rely on Internet of Things (IoT), automation, Blockchain or other advanced technology.


Robotics and automation have long been considered killers of manufacturing jobs. On one hand, robots will replace humans. In 2018, Forrester Research predicted that AI-enabled automation will eliminate 9% of US jobs.  But on the other hand, they will also create millions of new job opportunities in the support of “automation economy.” It will also create need for new skills.

Internet of Things (IoT) and Cloud Platforms

An analysis by Boston Consulting Group predicts that by 2020, companies will spend €250B ($267B) on IoT technologies, products, and services. Approximately 50% of IoT spending will be driven by industries with “less technology-centric companies,” such as manufacturing, transportation and logistics, and utilities.

With the huge amount of data manufacturing business are gathering, cloud based platforms enable processing them in real time. It can connect factories with new supply chains worldwide and allows faster response to demand, software planning and manufacturing systems.

Machine Learning in Manufacturing: Predictive Analytics Algorithms

Increasing numbers of manufacturers are starting to use predictive analytics algorithms. It helps with every aspect of the manufacturing process, such as efficiency, workforce productivity, or performance forecasts. To put it simply, predictive analytics algorithms are using available data to predict and to improve manufacturing operations and processes.